CBS’ Les Moonves “Salivating” For Upfront Ad Sales As Demand Grows

The ad market is “on fire” — with flames so intense that CBS plans to increase the amount of inventory it will sell in the upfront market, expecting to walk away with bigger sales and higher pricing than it saw last year, CEO Les Moonves told analysts today in his quarterly earnings call.

“The scatter market is as hot as its been in many many years,” he says. As a result “we are salivating” for upfront sales to begin. He added later that he can foresee double-digit-percent price increases for CBS.

CBS-owned TV stations should see ad sales increase by a low-single-digit percentage in Q3, but will accelerate in Q4 as political spots flood the market.

Some analysts say spending could be lower than expected if Donald Trump — who has devoted relatively little to TV buys — becomes the GOP presidential nominee. But Moonves says that “there stands to be a lot more spending in local elections as many candidates look to forge their own path.”

He isn’t worried about competition from digital rivals including YouTube. “Questions are now arising about the effectiveness of certain digital media platforms,” he says — leading marketers to realize that “they get their best returns” from broadcast.

On other matters, CBS says it plans to spin off its radio stations in an initial public offering — to be filed at the SEC by the end of July — but remains open to an outright sale. Several entities have expressed interest.

Moonves says he would “absolutely” consider offering CBS on Hulu’s planned skinny bundle service “if they offer us the right pricing for our subs.” That’s consistent with his view that new services will be “a huge positive” for CBS because they’ll need the network and will pay rates “even higher than from our current partners.”

With programming, CBS expects to have ownership stakes in 80% of its scripted series, and owns 15 out of its 16 pilots.

Moonves predicted that the NCAA contract “will be profitable every single year.”

He also talked up his CBS All Access streaming service, which plans to introduce the first original Star Trek series in 11 years followed by three or four originals each year. The CEO told analysts to “stand by” for upcoming news about that.

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